I have been playing a bit with Facebook for the last month or two. Not seriously – just through intrigue about why such a fuss is being made about it, and why the management of Facebook thinks it could be worth $10bn. My overall view is that it is probably a bit of a flash in the pan, though it does have some neat attributes that will mean it has probably got a longish future. But, I don’t think it can be worth anything like £10bn (never mind the super-absurd $100bn valuations). I’m not going to try and go into the valuation side – there are a wide variety of folks noting how odd this is – e.g. see here – just note my perspectives as a user.

From a ‘what does it give me’ perspective, I think that there are only two useful things. Firstly, as a social networking site, a large number of folks are on it. It’s kind of obvious, but it does present huge barriers to entry to ‘me too’ plays. The second useful thing is an open application interface that allows a vast number of applications to be created in Facebook. This is undoubtedly a good move as it allows a much faster and more diverse development – for example, there are about 10 ways to get this blog to show up on my Facebook page, including a dedicated WordPress one. I also quite like the status updates, though not so much that I’d class it as a ‘what does it give me’

What I am not after in using Facebook (and I’ll bet few are) is advertising. There is discussion about lean-back, receptive only and lean-forward, interactive media (e.g. TV vs. Internet). There is almost certainly the option of highly directed marketing on Facebook given the amount of personal information that is available to steer it. But, it’s usage differs dramatically from a search engine. For a search engine, a material proportion of the searches are in search of supply, so relevant advertising is welcome. For Facebook, it’s about social interaction, and that’s not an environment where I or others are really after ads. It doesn’t annoy me – I just don’t see them, just like I don’t see billboards. My mind filters them out so that I have to concentrate to notice them … and I don’t. I just had to look now to see if there is an ad on my Facebook homepage. There is – it’s from Pru health, and I guess that makes some sense (I’m at the age when folks start worrying about falling apart!). But, it or something like it must have been there every time I’ve gone to Facebook, and I simply hadn’t been aware of them at all.

I noted two advantages – the network and the apps. But, I think both have material issues that make them much less useful, and could seriously damage Facebook.

Network and data risk

The userbase undoubtedly provides value in the network and data. But, I get irritated by the way that Facebook uses data. It should be a good way to store my data in a way that others can get hold of in a controlled way. It sort of is, but it does impose restrictions – for example, the e-mail address is not text, it a picture of text. I presume this is to stop apps from scraping the data from Facebook to your own address book, so ensuring that Facebook is called up each time you want to know the address. Much of the value of Facebook is in this data and the linkages, so I can see why they’d like it to be a walled garden. But, from a user perspective it is getting in the way and making the experience less good. This is not going to be helpful in the long term.

It feels like a real weakness actually – it would only take someone like Google or the wikipedia foundation to launch a free-access personal information and network storage facility that could be used by any app to create a business destroying disaster for Facebook. And, there would be value to both Google (or similar) and users in this. For Google they’d have more data to use to steer ads when I actually did want them (like on searches). For me, I’d have enduring access to my networks and friends, and they’d have up to date information about me. Sites like Facebook could use that info if they wanted – indeed that should be welcomed – but I’d bet you’d get a ecosystem of apps tuned for specific purposes. For example, it could be used in Second Life, photo and video sharing sites, diaries, off-line mail systems, corporate system, … These could be used as apps within Facebook, but there are serious restrictions to those apps – 3D immersive environments, off-line apps and corporate networks would all be impacted. In short, the network reason for Facebook to be worth what it asserts it is would evaporate. The network only provides defence against me-too plays, not superior ones.

Applications risk

The ability for external parties to provide apps is a great move by Facebook. But, it carries risks. It is possible to find apps to do almost anything that will fit in the user interface restrictions. But, the majority of those used would fall in what I’d call ‘transient interest’. Virtual food fights, super-pokes, Pirates and the like. Entertaining for a (short) while, but not really sticky. The ones that feel to me that they have more sticking power are those that steer folks to external content – blogs, photos, videos, RSS feeds and the like. The fun ones are better handled by full environments (e.g. World of Warcraft, Second Life) or browser games. So, this just feels like a way of storing more data, but displaying it in a rich fashion. So, it is almost as susceptible to a data storage play as the more standard information. In addition the preponderance of jokey apps risks folks writing the Facebook platform off when it could give them benefit.

In summary

Facebook is useful, but far from critical. I could do without it without missing it, so it’s not in the same class as e-mail, my mobile phone, an address book. It could, of course, be because I’m a sad person without enough Facebook friends. But, I don’t think so. It’s because it feels a little superficial at the moment, and it has restrictions that are understandable but provide weaknesses that could allow it to be taken out. I haven’t done the valuation math, but knowing the base logic underlying it, I think that this is bubble valuation. This is possibly the widest used web 2.0 application, but there is an old adage that you shouldn’t trust the .0 version of anything. Remember that Altavista was the web 1.0 app of choice at one time – Google didn’t even exist.